BEAUTY CARE

Nail care sales show luster as economy trims salon visits

BY Antoinette Alexander

With the recent collapse of Lehman Brothers, and the Federal Reserve and central banks scrambling to pump billions into markets to ease the credit squeeze and calm investors’ nerves, the economic picture continues to look bleak.

But for those beauty shoppers who have refrained from chewing their nails off during this economic meltdown, it could mean more purchases of nail care products at mass market retail as consumers curb their salon visits. And in this climate, the artificial nail segment—namely those geared toward tween and teen shoppers—continues to be a shining star in nail care.

“[Colored artificial] is the lion’s share of the category of artificial nails,” said Mike Matulis, senior vice president and category manager for nail care company Pacific World. “The French nails are healthy, and another trend we are seeing is pre-glued nails.”

The teen/tween interest in false nails represents $32 million, and 60 percent of beauty purchases for these young girls are parent-supplied, according to data provided by Pacific World.

The targeting of younger beauty shoppers was evident at one CVS store visited by Drug Store News where lip balms and lip gloss for tweens/teens were merchandised adjacent to artificial nails, some specifically for younger girls.

According to ACNielsen sales data of food, drug and mass (including Wal-Mart panel) provided by Pacific World, within artificial nails there are three segments representing 60 percent of total dollar sales that are growing. Pre-glued nails were up 30 percent for the 52 weeks ended July 12 as a result of the tween nail offerings. Colored nails were up 1 percent, with design tips targeted toward teens helping to support the growth. Gel kits were up 1 percent following a strong trend in salons, suggesting crossover appeal in mass retail.

The Girlie Nails, under Pacific World’s Fing’rs brand, are shorter in length and self-adhesive. They feature such fun designs as butterflies, hearts, glitter stars and glitter kitties.

Also under the Fing’rs brand are the Edge Nail Kits for the younger consumers that want “nails with attitude.” The kits are short-length nails in such styles as: black onyx, red angel, the finish line, pink argyle french and skull & crossbones. Pacific World inked a licensing deal with independent music artist Mylin, who is featured in ads and on the packaging of Fing’rs Edge nails.

Grace Tallon, senior vice president of marketing for Kiss Products, which has among its nail care offerings the pink sticker Nails and Pink glue-on nails for younger beauty mavens, noted that the artificial-nail segment in general is flat. However, within the category there are a couple of segments—such as decorated nails that have some type of design—that are up in both units and dollars by roughly 30 percent.

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Alberto-Culver obtains Noxema line from P&G

BY Antoinette Alexander

MELROSE PLACE, Ill. Alberto-Culver has completed its acquisition of the worldwide rights and trademarks to the Noxzema skin care brand from Procter & Gamble.

The transaction includes the existing business in the United States, Canada and portions of Latin America. P&G will continue to operate its existing Noxzema shave care, antiperspirant/deodorant, body wash and body soap business in portions of Western Europe.

Alberto-Culver’s portfolio of beauty products includes TRESemme, Alberto V05, Nexxus and St. Ives.

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Physicians Formula buys back common stock, evaluates price per share

BY Antoinette Alexander

AZUSA, Calif. Physicians Formula’s board authorized in September the repurchase up to $10 million of the company’s outstanding common stock.

The company had approximately 14,096,227 shares of common stock outstanding as of Aug. 8. In connection with the repurchase program, the company also announced that it has adopted a written trading plan under Rule 10b5-1 under the Securities Exchange Act of 1934, to facilitate the repurchase of shares of common stock under the repurchase program.

In addition, the beauty company has entered into an amendment to its existing senior credit agreement with Union Bank of California, N.A. to permit borrowings under the revolving credit facility to fund the repurchase program.

“Our board believes that at the current stock price, our stock is undervalued based on many criteria, including the long-term growth prospects for the company, and that the repurchase program is an effective means to increase shareholder value,” stated Ingrid Jackel, chief executive officer of Physicians Formula. “Our board also believes that we are well positioned to increase long-term shareholder value by growing our business through product innovation and differentiation, and by providing strong support for existing and new products through creative promotional activities.”

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